Mutual Fund In India
Mutual funds pool money from multiple investors into SEBI-regulated schemes, where professional fund managers invest across securities according to each scheme’s stated objective, strategy and risk profile.
Mutual funds in India work in a three-tier structure - a sponsor, a trustee and an asset management company (AMC). The trustee holds assets in trust for unitholders.
Investors get units for their investments in the mutual fund scheme. The value of each unit is reflected as Net Asset Value (NAV), which is declared on every business day.
India’s mutual fund industry has grown about 465% in a decade, with AUM rising from INR 15.18 trillion in July 2016 to INR 85.76 trillion in July 2026 (Source: AMFI).
With 1,800+ open-ended schemes, India’s mutual fund universe spans a wide range of asset classes and investment approaches, giving investors plenty of choice.
REASON AND BENEFITS
Professional Management
A qualified fund manager and research team handle security selection and portfolio review.
Risk Diversification
Exposure spreads across multiple securities and sectors, so no single holding determines performance.
Accessibility
SIPs start from as little as INR 100; lump-sum investments typically from INR 1,000.
Redemption Access
Open-ended schemes accept redemption on business days, subject to exit load and applicable lock-ins.
Regulatory Framework
SEBI-regulated, with daily NAV, monthly portfolio disclosure and a scheme-level Riskometer.
- Equity Funds: Equity funds invest mainly in company shares. Their focus is capital growth, with returns and risk shaped by movements in the stock market.
- Debt Funds: Government securities, corporate bonds and other fixed-income instruments form the core of debt funds. Their risk and return profile varies with credit quality and interest rates.
- Hybrid Funds: Equity and debt come together within a single scheme. The allocation can vary considerably, creating options ranging from equity-heavy portfolios to more conservative combinations.
- ELSS (Equity Linked Savings Scheme): Equity funds eligible for deduction under Section 80C, with a three-year lock-in - the shortest among 80C options. Available only under the old tax regime.
- Index Funds and ETFs: Track a market index rather than picking securities actively. Costs are typically lower; ETFs trade on exchanges and require a Demat account.
- Solution-Oriented Funds: Retirement and children’s funds fall under this category. They are structured around specific long-term goals and generally carry lock-in requirements defined for the scheme.
- International Funds: These funds invest outside India, providing access to overseas companies, sectors and markets while adding currency movements and global market conditions to the investment equation.
- Other Types: The mutual fund universe also includes funds of funds, money market, multi-asset and other schemes built around specific strategies or exposures.
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Frequently Asked Questions
How is a mutual fund taxed in India?
Which mutual fund is best for beginners?
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What is the minimum amount required to invest in a mutual fund?
